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Read the fine print.
I recently got into the rewards game due to my long-standing favorite credit card (Citibank 2% Cashback) asked me to participate in a known scam behavior “I’m going to send you a text and you read the code back to me”. The text arrived “customer support will never ask you for this number”. And I had just read an article about how scammers login as you and then they are off to the races before you can figure out what happened.
I’ve been playing around with the credit card of the month, mostly because different cards are less than truthful about how their rewards program works. X1 is the worst – they say they do 3% (as long as you meet the minimum purchase requirements, which is easy for us to hit), but you can’t actually get 3% out unless you buy from certain stores, so it really comes out to 2.1%, and you have to deal with their app (no website access). And they didn’t have monthly statements until recently. Their “boosts” make it a little better, but to make the most use of those, everyone in the household has to have the app (and have a smart phone) to make use of it.
We’re enjoying the 10% can back Discover card, though that is only for the first year, but I think we’ll keep the 5% rotating categories, and I just recently signed up for a Venmo 3% in the top category that it chooses for me based on my spending, 2% in the second category and 1% everywhere. It doesn’t allow authorized users, so that might be a deal breaker, as then everyone needs to get their own account, etc.
Capital One has a simple 3% for groceries and a couple other categories.
We also did some hotel and airfare “temporary” cards for their sign-on bonuses.
My wife isn’t happy with all the accounts, so we’re trying to consolidate.
I never thought I would be one to chase credit card rewards. It started when I joined Costco and had to use their Visa card. It gave 2% for Costco, 4% for gas and 3% for travel. They also extend warranties by a year which is a nice feature. In fact, we had a $1,900 TV that died after 18 months. The mfr only had a year warranty but the Costco CC extened warranty and fully reimbursed us the full purchase price.
I already had a Visa card with my bank and upgraded it to one that provides 1.5% for all purchases. A couple of years ago I signed up for a Amex card that gives 6% reward for food. I pay $95 a year for that card but our grocery shopping far exceeds that.
We will get more than $1k of rewards this year, and that would be more if I could get my wife to use each of these cards for specific purposes. It is not a lot of money, but it takes very little effort to do it and I consider it worthwhile.
My wife and I use Capital One Venture for points and use them to pay for flights to Europe and vacation expenses. Just about every month expense is put on the Capital one card and for most charges we get 2 points for every $1, spent. We average about $4,500 in charges per month so we average 9000 points per month. Flight to the Netherlands is $650 right now so that’s 65,000 points so about 7 months of monthly charges.
I use the Costco Citi card for restaurants, gasoline, Costco, and some travel-hotels, etc. Have Quicksilver to get 1 1/2% on everything and now the United Chase Card for mileage points for airline tickets, which will come in handy once COVID goes endemic. I use my Quicksilver dollars to pay for Amazon items mostly.
I use the Visa Signature cash rewards card from Alliant Credit Union. No annual fee and 2.5% cash back on up to $10k in purchases per month. Last year’s spending netted me a $1600 credit which I took in January of this year. Strategy: find a rewards card with no fee; that works on all purchases; use it for everything; pay off the bill entirely every month; collect the rewards once a year.
MOST IMPORTANTLY you MUST pay card in FULL monthly. They are NOT rewards if you pay interest! Use whatever card you get best rewards on and save them up for big things. We use ours for vacation but as cash back against the bill. If we take and trip and add an expensive outing I charge it to my card and the take that amount in points and use them to pay the bill. Works great for us!
I use a Citi card. 2 percent back on purchases. I let it build up then use for Christmas. Transfer cash to checking account. This is tax free money!
Carry four: AMEX Blue preferred for groceries(6%), Chase Biz for dining, office and home supply stores(3%), BJs for BJs instore(3%) and gas(add’l $0.10/gal – eliminates need to carry the membership card), Fidelity Elan for other(2%).
Do not carry but use: Amazon card for Amazon online only(5%), an airline card of the moment to get sign up bonus miles, use for upcoming trip – cancel and repeat. Couple of legacy bonus cards, no longer rewarding competitively but keep in the drawer and use once a year to keep active and keep my ave card age high for FICO.
Take whichever of the above for international travel that don’t charge currency conversion adders(only time Amazon Prime may be carried).
I try to keep it simple with 2 cards: An Amazon visa that gives me 5% back on Amazon purchases (which for me is a lot of money on an annual basis) and a Citicard that gives me 2% on everything else. I prefer cash back to “points” because I can use it for anything with no effort. But I am considering a United card that will give me 70,000 bonus miles in anticipation of a big vacation in the next year.
I prefer using a smaller number of zero-fee cards that return cash rewards. I use Costco Citi for gas, Costco purchases, travel and dining; an Amazon Chase Card for Amazon and Whole Foods purchases; and Fidelity Elan for everything else.
For myself, the best strategy is to just hold one ‘all purpose’ rewards card and pay it off every month. I use a Costco Citi card to pay for nearly all of my monthly expenses. I typically get a $250-$300 cash reward in February of each year.